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Chapman Company obtains $100$ percent of Abernethy Company$$s stock on January $1,2023.$ As of that date, Abernethy has the following trial balance:

Items Debit Credit

Accounts payable $-$ $ $56,400$

Accounts receivable $ $43,900-$

Additional paid$-$in capital $-50,000$

Buildings $($net$)(4-$year remaining life$)217,000-$

Cash and short$-$term investments $76,750-$

Common stock $-250,000$

Equipment $($net$)(5-$year remaining life$)367,500-$

Inventory $96,500-$

Land $122,000-$

Long$-$term liabilities $($mature $12/31/26)-182,500$

Retained earnings, $1/1/23-396,250$

Supplies $11,500-$

Totals $ $935,150$ $ $935,150$

During $2023,$ Abernethy reported net income of $$103,500$ while declaring and paying dividends of $$13,000.$ During $2024,$ Abernethy reported net income of $$145,250$ while declaring and paying dividends of $$47,000.$

Assume that Chapman Company acquired Abernethy$$s common stock for $$800,660$ in cash. Assume that the equipment and long$-$term liabilities had fair values of $$390,450$ and $$151,340,$ respectively, on the acquisition date. Chapman uses the initial value method to account for its investment.

Required:

Prepare consolidation worksheet entries for December $31,2023,$ and December $31,2024.$

$1.$ Prepare entry S to eliminate stockholders' equity accounts of subsidiary.

$2.$ Prepare entry A to recognize allocations in connection with acquisition$-$date fair values.

$3.$ Prepare entry I to eliminate the subsidiary income accrual recognized by the parent.

$4.$ Prepare entry E to recognize $2023$ amortization expense.

$5.$ Prepare entry $*$C to convert parent company figures to equity method.

$6.$ Prepare entry S to eliminate stockholders' equity accounts of subsidiary for $2024.$

$7.$ Prepare entry A to recognize allocations attributed to specific accounts at acquisition date for $2024.$

$8.$ Prepare entry I to eliminate the subsidiary income accrual recognized by the parent.

$9.$ Prepare entry E to recognize $2024$ amortization expense.

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